Enjoy Life. Hire Someone To Watch Your 401K
The current U.S. stock market environment is causing concerns for the most experienced and sophisticated money managers. It is no wonder that the thought of losing the last several years of stock market returns fills individual company 401K retirement plan participants with dread. Not to mention the investors who are close to retirement and do not want to see their retirement savings crushed by serious bear market losses.
With that in mind, there are two likely outcomes to the always prevalent stock market gyrations.
One, is losing a little of your retirement plan savings once-in-a-while due to stock market noise. Over the last few years these kinds of stock market declines have not lasted very long. Each decline was followed with another new all-time stock market high. World current affairs seem to be driving the stock market, not corporate returns.
The other possible outcome is a life-changing loss of 25-50%. These bear market corrections historically happen an average of every 8 years and the stock market can take over 4.5 years to recover back lost ground.
Have you ever thought you’d be happier if you could just pay someone else to do watch your company 401K retirement plan account? Like most other things in life, there is a study that will help you answer that question. The National Academy of Sciences of the United States of America has researched the topic of, “Buying Time Promotes Happiness.” The study concluded that spending money to outsource disliked tasks, reported greater overall life satisfaction. Seems reasonable, if not obvious! Researchers also found that when people used money to buy more time, they were happier than buying more stuff.
There is no reason to feel guilty about paying someone for a task that you could easily do yourself. You don’t work on your own teeth or cut your own hair. Not many people do their own taxes, write their own wills, or repair their own vehicles. Who really likes to cut their own grass each weekend?
More $$ For Doing Less?
A recent article in Forbes cites a study that shows that those who used managed accounts earned 3.32 percentage points more on average than do-it-yourselfers net of fees. That’s probably because of the tendency of investors to chase performance, becoming aggressive when the stock market is doing well and more conservative when the market is down, which leads to buying high and selling low. Many investors also leave their money in cash, either because it was the default option when they started and they never changed it or because their unfamiliarity with investing makes them too afraid to do anything else.
Less sophisticated investors and also time-starved people spend their money wisely on tasks that they realize they are not experienced and qualified to do for themselves. The current stock market environment is another good reminded that your mental well-being and financial security requires a timely review. Plus, letting the advisory team at Research Financial Strategies do the worrying about your retirement savings and 401K could be one of the easiest ways to help fulfill your retirement goals.
Contact us today for a no obligation 2nd opinion.